The NSW Energy Minister has confirmed at Estimates hearings that NSW Cabinet has never discussed last year’s billion-dollar electricity hedging losses and waved it off as someone else’s responsibility, Shadow Minister for Energy Mike Baird said today.

“It is hard to imagine what culture is in place in the NSW Labor Government when not even one question was asked in Cabinet on why $3.7 billion in hedging losses occurred last year and just as importantly if they are likely to happen again,” Mr Baird said.

“You would hope that every Minister would want to know how these losses happened and what protections are in place to ensure they are not repeated. Yet not even the Minister responsible for the industry is interested,” he said.

“It is not enough to say that the state-owned corporations that incurred the losses are ‘independent’ because if these entities fail it is the NSW taxpayer who foots the bill.

“This culture of no accountability or financial discipline is what has driven this State to the mini-budget crisis that is now upon us.”

Mr Baird said Energy Minister Ian Macdonald further demonstrated the NSW Government’s lack of risk management in his approach to the coal contracts that supply the electricity generators.

“When asked about the Government’s coal contracts Minister Macdonald thought that most contracts were long-term, however the majority are about to expire. 

“When these contracts expire, NSW will be exposed to significant increases in the cost of coal and therefore the cost of electricity.

“The Minister agreed it’s ‘possible’ the cost of electricity could go up as a result but was unable to say how the Labor Government is managing this risk for taxpayers.

“The best the Minister could muster in response to whether the price of electricity will rise significantly, was “let’s hope not”.

“At a time when the State’s finances are stretched to the limit, you’d think the NSW Labor Government would be studiously examining any losses and protecting the State’s credit rating,” Mr Baird said.

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